Key Points

  • The Federal Circuit affirmed three PTAB final written decisions holding that Google failed to prove claims of DDC Technology's '075, '199 and '001 VR viewer patents obvious.
  • Substantial evidence supported the board's findings that Google copied DDC's product and that emails from three Google engineers praising a prototype button constituted industry praise.
  • The court held the board did not legally err in finding that strong copying evidence and moderate industry praise outweighed a contested showing that the prior art taught every limitation of claim 1 of the '075 and '199 patents, and it said the prima facie concept most naturally belongs to patent prosecution.
  • The court affirmed the board's constructions of 'disposed on' (claim 18) and 'lever' (claim 20) in the '075 patent.
  • Google's APA challenge on claim 27 of the '001 patent failed because the board had invited further argument at institution, and its claim 28 arguments were forfeited.

A federal appeals court on Nov. 5 upheld patents on a smartphone-based virtual reality viewer against a challenge from Google LLC, ruling that evidence Google copied the patent owner's product could outweigh prior art that disclosed every element of the invention.

A three-judge panel of the U.S. Court of Appeals for the Federal Circuit affirmed three decisions of the Patent Trial and Appeal Board. The board had found that Google failed to prove claims of three DDC Technology LLC patents obvious. Judge Reyna wrote the opinion for the panel, which also included Judges Hughes and Stark.

The decision rejects Google's argument that a "strong prima facie case" of obviousness should have defeated DDC's evidence of copying and industry praise, two of the "secondary considerations," or objective indicia, that must be weighed before deciding obviousness. The board could find Google's challenge unproven, the panel held, even though it concluded that the prior art taught every limitation of the key claims.

The patents, U.S. Patent Nos. 9,420,075, 10,528,199 and 11,093,001, describe a viewer with a housing that holds a smartphone and an input mechanism that a user works from outside the housing to touch the phone's screen.

Google sought inter partes review. In all three cases it combined a Japanese publication called Kondo, describing a smartphone attachment for three-dimensional viewing, with a U.S. application called Chu, describing a mechanism for operating a touchscreen inside a waterproof housing.

The board agreed that the combination taught each limitation of claim 1 of the '075 and '199 patents and that a skilled artisan would have been motivated to combine the references. It nevertheless found that DDC had established copying by Google, which it weighed "heavily," and industry praise, which it gave "moderate weight."

The copying evidence compared Google's GCV2 VR viewer with the DODOcase VR 1.2 viewer and a prototype built by Patrick Buckley, the patents' named inventor and the founder of DODOcase. Google argued that the board had compared the products to the patent claims rather than to each other. The panel disagreed, writing that "the Board provided detailed comparisons of Google's GCV2 VR viewer to the DODOcase VR 1.2 viewer and Mr. Buckley's prototype."

The praise evidence came from Google's own engineers. After Buckley, then a prospective business partner, emailed videos of a prototype viewer, three Google engineers replied "That button is genius," "That's an ingenious button!" and "That button looks really neat!" Google argued that the emails were biased compliments made in the course of a business relationship.

Judge Reyna distinguished earlier cases that discounted self-serving statements by researchers or by a party's own president. "Here, Google's engineers were responding to a third party about a non-Google prototype viewer," Judge Reyna wrote. The board had already treated the third email as mere politeness and found the other two "somewhat offset by the context in which they were made."

On the ultimate question, Google contended that its "strong prima facie case easily outweighs DDC's secondary-considerations evidence." The panel said that characterization was Google's, not the board's. "The Board made no finding that Google's evidence was 'strong' or 'overwhelming,'" Judge Reyna wrote, noting that the board had instead called the copying evidence "strong."

"The concept of a 'prima facie case of obviousness' most naturally relates to patent prosecution," Judge Reyna added, citing precedent that the burden-shifting framework patent examiners use does not apply in an inter partes review.

The court acknowledged that a strong obviousness case cannot be overcome by a far weaker showing of objective indicia, but it said that was not this case. The board reached its motivation-to-combine finding only after rejecting two other rationales Google offered and after a contested trial, and DDC never conceded the point. "Based on this record, we cannot say as a matter of law that Google's evidence of obviousness is strong enough to outweigh DDC's evidence of nonobviousness," the court held.

The panel also affirmed the board's reading of two terms in the '075 patent. It called Google's attack on the construction of "disposed on" in claim 18 a "strawman," because the board had not required direct contact and had rejected only connections that are "far removed." It agreed that a "lever" in claim 20 means "a stiff body pivoted on a fulcrum."

On claims 27 and 28 of the '001 patent, the board had flagged problems with Google's theory when it instituted review and invited more argument, but Google did not address either claim in its reply. The panel rejected Google's contention that the board violated the Administrative Procedure Act by springing a new reading of claim 27 at the end. "The Board cannot be faulted under the APA for Google's failure to develop its position as to claim 27," Judge Reyna wrote. Google's claim 28 arguments, the court held, were forfeited.

Nathan K. Kelley of Ashurst Perkins Coie LLP argued for Google. Cortney Alexander of Kent & Risley LLC argued for DDC.

The ruling leaves in place the claims Google failed to prove unpatentable: claims 1-12, 14 and 18-20 of the '075 patent; claims 1, 2, 4-6 and 17-26 of the '199 patent; and claims 27 and 28 of the '001 patent. The board had found other challenged claims unpatentable, and those rulings were not part of Google's appeal. The Federal Circuit affirmed the board's judgments on the surviving claims without remanding any issue.